Qualcomm violated federal antitrust law and engaged in tactics deliberately intended to limit competition in the cellphone chip market, a federal judge in California ruled Tuesday in a victory for federal regulators.
U.S. District Judge Lucy Koh of the Federal District Court for the Northern District of California sided with the Federal Trade Commission in the suit, which was filed in 2017.
The Federal Trade Commission took aim at Qualcomm’s patent-licensing practices and argued the company implemented measures to harm competition in two markets for modem chips in cellphones.
“Qualcomm’s licensing practices have strangled competition in the [chip markets] for years, and harmed rivals, [original equipment manufacturers], and end consumers in the process,” Koh wrote in her 233-page decision, parts of which were redacted.
Koh ruled the San Diego-based company used its position as an industry leader to charge cellphone makers excessively high royalties and took steps to keep potential competitors from entering the market. Her order blocks Qualcomm from continuing with its patent practices and requires the company to negotiate or renegotiate the license terms with its customers.
Qualcomm is also required to submit to compliance and monitoring for seven years and report annually to the Federal Trade Commission its compliance with the remedies detailed by the court.
The chipmaker intends to seek a stay of Koh’s order and an expedited appeal to the 9th U.S. Circuit Court of Appeals.
“We strongly disagree with the judge’s conclusions, her interpretation of the facts, and her application of the law,” Don Rosenberg, Qualcomm’s general counsel, said in a statement.
The ruling from Koh comes after Apple and Qualcomm reached a settlement last month that ended their years-long legal battle over royalties related to Apple’s use of Qualcomm chips in iPhones.
